My philosophy is that it is hard, but not impossible, to beat the market, and that it is easy, and imperative, to save on taxes and money management costs. I graduated from Harvard in 1973 with a degree in linguistics and applied math. I have been a journalist for 40 years, and was editor of Forbes magazine from 1999 to 2010. Tax law is a frequent subject in my articles. I have been an Enrolled Agent since 1979. You can email me at --williambaldwinfinance -- at -- gmail -- dot -- com.

Harvard Grad Seeks Babysitting Jobs

People with college degrees make $1 million more over their careers than people without, and they are less likely to be unemployed. So if we open college doors to everyone, the country will be better off.

So goes the defense for the grand expansion—in price and in volume—of the higher education business over the past few decades. Is it possible that the premise is just wrong? In that case the producers of education have perpetrated a fraud on the rest of us.

It’s a clever fraud, built around a subtle logical flaw called the fallacy of composition. That is the fallacy that has you thinking a phenomenon true for any one person or thing can be simultaneously true for every person or thing. The classic illustration of the fallacy goes like this: One person can see better at the ballgame by standing up, so if everybody in the stadium stands up they will all see better.

If one person can better his lot in life by getting a B.A., it does not follow that the economy will be stronger when everyone has a B.A. To see what’s going on, imagine that the country’s 140 million jobs are ranked by the extent to which they demand verbal and numerical skills. At the top, math professor; at the bottom, janitor.

Average pay in the top half is higher than average pay in the bottom half. There is, of course, great variation within each group: The more academic one has adjunct professorships paying $15,000 and the less academic one has baseball jobs at $15 million. But averages are what matter here.

Now consider another feature of American life, that employers usually don’t give ability tests to their applicants. Either they have lawyers telling them they can’t or they are just squeamish. If they want to select for intellectual skills they must resort to a proxy measure. A degree serves that purpose. If half the people in the work force have a bachelor’s degree and half don’t, the half with the degree are going to wind up with most of the jobs in the upper half of our list.

College graduation is an imperfect measure of ability. Some brilliant entrepreneurs struggle with school because of dyslexia. Some clunkers from well-connected families wind up with Ivy League credentials and get to be president of something. But, absent a better sorting mechanism, the degree will influence who gets ahead.

This credentialing business can go on even in the absence of any subject matter connection between the school course and the job. A first in classics at Oxford or Cambridge used to be the entry ticket to a plum job in the British foreign service, not because fluency in Latin would come in handy, but because it was an indicator of intelligence.

In a country where half the population went to college, would it pay for one person to borrow money and struggle to get a degree? Maybe. It might get him out of the car wash and into an accounts receivable job. It does not follow, however, that if everyone goes to college then everyone will wind up with a top-half job.

Politicians declare that in a land of opportunity, everyone should go to college. The egalitarianism behind this notion is hard to fault. After all, there is going to be some unfairness in a system that has only half the population getting a four-year degree. There will be rich kids who land legacy slots at fancy colleges, poor kids who fall behind while attending rotten elementary schools.

But an everyone-goes system is hugely wasteful. Richard Vedder, an Ohio University economist who helps run the Center for College Affordability & Productivity, cites this interesting statistic: 115,000 janitor jobs in the U.S. are held by people with bachelor’s degrees. He says economic output would be higher if the federal government didn’t take quite so many 18- to 22-year-olds out of the workforce and send them off to college on Pell grants.

Charles Murray, a scholar at the American Enterprise Institute, thinks that the four-year bachelor’s degree has turned into something of a farce. Many of the students attending college shouldn’t be there, he has written. Many of the courses do nothing to make the student more valuable to an employer. Why not junk the B.A. and replace it with a system of certification (in programming skills, for example)? The Educational Testing Service (the SAT outfit) could make a nice business of this.

Murray is controversial because he takes the intellectual stratification of our society as a given. This sort of thinking conflicts with politicians’ egalitarian pronouncements. But egalitarianism that doesn’t deliver job skills doesn’t make lives better.

If thinkers like Vedder and Murray had more sway, some of the kids struggling with algebra in high school would be studying welding or car mechanics instead, and many of the ones whiling away four years on liberal arts courses would be studying nursing or software instead.

For company in misery, unemployed liberal arts grads can take note that in this unforgiving economy a sheepskin from even an elite school doesn’t guarantee career success. Someone recently forwarded to me an ad that was posted on the electronic bulletin board for parents at a prestigious private school in Manhattan. Here it is, with names and some other details omitted:

My sister recommended a close friend and former classmate at Harvard who is looking for babysitting jobs in the NYC area. He studied psychology and graduated in 2011, and is currently working part-time as an intern in Midtown. He is a caring, gentle guy and is absolutely great with children.

If he didn’t get a scholarship the poor fellow must have spent $190,000 on that Harvard degree.

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Great article and thank you for opening up more dialogue about kids in high school getting trade training instead of being forced to endure hours in subjects they will never pursue. Allows them to “fish” (feed themselves) until or if they decide to pursue other education later — or make a great living in the trade industries.

I would say a math professor delivers less value than the janitor. I do not think many would agree that a math professor has the highest skill level either. The world does not pay for skills (it might to start). The world pays for results and value delivered. Delivering value takes a lot more than a high level of numerical skills. The judgement, drive, persistence and character required for success are much more important.

You have a point, but you can’t ignore the fact that Math Professors, or better yet, people who take up math as a major are usually the same people that give us Google, High Level Physics, Space Exploration, everything with computers and coding, and well the list goes on, but its pretty self evident that with out math focused individuals the “Information Age” would be non-existent.

What’s wrong with a babysitting job? I’m at Harvard and a lot of my friends are considering paths which they know won’t pay them tons of money but which enables them to do what they love in the end. Yeah, babysitting jobs do not make you millionaires but they pay fairly for what they are worth, and to me (and a lot of other people, grad or non-grad) good and honest options for some extra money, as a side to an exciting internship for instance, like for the young man you mention. I think your article totally ignores some of the trends of today’s job market, no less the psychology of graduate aspirations. Music or journalism is never going to turn you into the equivalent of Bill Gates (or perhaps only if you are Yo-Yo Ma, in fame that is–not quite in money), and that is true regardless of whether you are a grad, Harvard grad, or otherwise (perhaps you know since you work in the journalism field). I appreciate your bringing to light one of the problems of today’s job market (though the main reason behind this issue–the impossibility, if everyone or a vast majority of the nation went to college, that all could get top-half jobs, since by definition they are ‘top-half’ jobs–seems an obvious one even without extensive expanding upon). But simply because we are Harvard grads doesn’t make us all money-hungry machines who want to get the toughest, highest-paying jobs that are sought after in general but also with the longest hours. Some here choose that path but some do not. There are happy and unhappy people both ways. So what I am trying to say is, thanks for the sympathy, but I would say a lot of us don’t need it. Please give us credit for some of the choices we make, even against a sad economy. And by the way, Harvard gives out generous financial aid to a higher number of its students, but very few ‘scholarships’. Perhaps it’s a wise thing to research the context before you grieve for the ‘poor’ young man you seem so keen to tell the tale of.

We cannot continue to be a nation where higher education is a journey of self-discovery and mediocrity. There is a 14-year old down the street that is capable of being a babysitter, and they didn’t need to spend four years in one of the most prestigious institutions of higher learning to do it. What makes it worse is that we condone this by claiming it is fine as long as this individual is happy and fulfilled. We support mediocrity by a perceived notion that generating wealth is immoral. While wealth is not the measure for success, it isn’t a sin either. We need to look to the graduates of these institutions to be leaders and innovators. I feel for the individuals who were denied the opportunity to attend Harvard because classes were filled with students willing to settle for mediocrity.

Why can’t we continue to be a nation where higher education is a journey of self-discovery?

1. Our economy is changing so fast that training for a specific skill is often counterproductive. The jobs are often filled by the time graduates qualify for the “hot job” and other jobs, that didn’t even exist four years prior, are suddenly are now “hot”. Self discovery often leads to flexibility.

2. You are equating self-discovery with mediocrity. Many of our high-tech innovators kicked around before they found their “true calling”. You are also confusing that short term “loss” (wistful wandering) with long term success. How are these folks doing at 40?

3. I’d say a plumber is more important than most people with an MBA or undergraduate business degree. But while we like to slam liberal arts majors, the “job creators” who moves money around for a fee don’t warrant much more respect. It used to be that most of those jobs were by hungry kids who started in the mail room or started their own business and made it grow.

Thanks for this article. I think the Chronicle of Higher Education nailed it a few years ago asking “is higher education the next bubble that’s going to burst?”

Three additional points:

1) This is impacting women more than men, and it’s just beginning. When one considers that a majority of total college students are women now, *and* yet they are very absent from degrees with economic value, *and* are taking on epic amounts of student debt…one can see that we will soon have a lost generation of female college students, doomed by debt. Young men know this and per the latest Pew numbers, young women are much more interested in marriage than they used to be, while young men are much, much less interested than before. The guys don’t want to get stuck with the bill that a sociology major has rung up.

2) Certification can definitely help. The Feds can help by setting up a national level board certification for college subjects. And then specify in federal hiring that a job requires “either a 4 year degree or XYZ, or a qualifying score of 3 or better on the national XYZ board exam”

3) It is high time the U.S. adopted more Germanic attitudes toward skilled trades. To become a Meister in a trade in German-speaking Europe is no small achievement, and accords respect in just about any social setting. The condescension toward skilled technical work in the U.S. is an unfortunate legacy of the English. It does tremendous harm to everyone. To this end, trade unions in the U.S. should be more like German / Dutch / Swiss unions, with an emphasis on continuous education and reinvestment in the members of a trade guild.

Please continue to write about this very important subject. It is a crime that has been foisted on the young by the educational establishment and the government. It is based on the third lie—statistics. Research has shown that the top 10 percent in any college profession make 3 times more than the bottom 10 percent. Our youth is being saddled with huge debts just to keep our university systems running. We systematically demine a person’s worth when they choose a non college career path. If we were to be truly egalitarian we would give equal respect and societal credit to the college professor and the janitor.